Costco

Costco Wholesale Corporation

File:Costco Wholesale logo 2010-10-26.svg Logo used since 2010
Company type	Public
Industry	Retail
Predecessor	Price Club (founded 1976)
Founded	September 15, 1983 (1983-09-15) in Seattle, Washington, United States
Founder	Jim Sinegal, Jeffrey H. Brotman
Headquarters	Issaquah, Washington , United States
Area served	Worldwide (905 warehouses as of May 2025)
Key people	Hamilton E. James (Chairman), Ron Vachris (President & CEO)
Products	Merchandise sales, cash-and-carry wholesale services, warehouse clubs, fuel stations
Revenue	US$254.5 billion (2024)
Operating income	US$9.285 billion (2024)
Net income	US$7.367 billion (2024)
Number of employees	333,000 (2024)
Website	www.costco.com

Costco Wholesale Corporation, commonly known as Costco, is an American multinational enterprise that manages a network of membership-exclusive big-box warehouse retail outlets. By 2021, it was recognized as the third-largest retailer worldwide. As of August 2024, Costco has become the leading global retailer specializing in beef, poultry, organic fruits and vegetables, and wine. Nearly one-third of U.S. consumers regularly shop at its warehouse locations. In the 2024 Fortune 500 ranking by total revenue, Costco secured the 11th spot.

The company is based in Issaquah, Washington, and its Kirkland Signature private label pays homage to its earlier headquarters in Kirkland, Washington. The inaugural Costco warehouse opened in Seattle in 1983. The company’s roots date back to 1976 through a merger with Price Club, which was originally established in San Diego.

Costco initially concentrated on a wholesale model serving business customers but later broadened its membership to include individual shoppers and developed its own private label brand. As of May 2025, Costco operates a total of 905 warehouses worldwide, with 86% situated in North America, including the United States, Canada, and Mexico.

Key leadership figures include Chairman Hamilton E. James and President & CEO Ron Vachris. In 2024, the company generated revenues amounting to US$254.5 billion, with operating profits of US$9.285 billion and net earnings of US$7.367 billion. Globally, Costco employs around 333,000 individuals and serves a membership base of 136.8 million. Its offerings encompass merchandise sales, cash-and-carry wholesale services, warehouse clubs, and fuel stations.

Price Club

The earliest antecedent of Costco was Price Club, which inaugurated its first store on July 12, 1976, located on Morena Boulevard in San Diego, California. Founded by entrepreneur Sol Price along with his son Robert following disagreements with the new owners of FedMart, Price Club was a pioneer in introducing the membership-only warehouse club concept. This initial outlet operated within repurposed airplane hangars once owned by Howard Hughes and remains active today as Costco Warehouse #401.

Price Club primarily catered to small business proprietors by offering bulk merchandise at reduced prices through straightforward outlets that required an annual membership fee. The company went public in 1980 and expanded to 24 locations across the Southwestern United States with a membership count of 1.1 million by early 1986. Its international growth commenced with a store opening in Montreal, Canada in 1986 and progressed with an entry into Mexico City in 1992 via a joint venture with Controladora Comercial Mexicana. Additionally, plans were announced to extend operations into Spain and Portugal through its Canadian subsidiary.

Costco opens

The first Costco warehouse was established on September 15, 1983, in Seattle by Jim Sinegal and Jeffrey H. Brotman. Sinegal brought extensive experience from his time working alongside Sol Price at FedMart in wholesale distribution, while Brotman was an attorney from a notable Seattle retail family who had early involvement in retail distribution channels. Sinegal’s career began as a grocery bagger. Initially, Costco focused on selling products to small businesses with only an 8 to 9 percent markup over wholesale costs.

Following the Seattle launch, Costco rapidly expanded with additional warehouses opening in Portland, Oregon and Spokane, Washington by December 1983. On December 5, 1985, Costco became publicly traded on NASDAQ at $10 per share; at that time it operated 17 warehouses across the country employing approximately 1,950 staff members. The corporate headquarters relocated from the original Seattle facility to Kirkland in 1987.

The "PriceCostco" merger

In 1993, Price Club and Costco united after Price Club rejected Walmart's proposal to merge with Sam's Club. Both organizations operated under comparable business frameworks and were similar in scale, making their consolidation a logical move. The merged company, known as PriceCostco, provided membership access across 206 outlets and generated $16 billion in yearly revenue. Initially, leadership was shared between executives from both companies, but the Price family departed in 1994 to establish PriceSmart, a separate warehouse chain focused on Central America and the Caribbean.

In 1996, Costco shifted its corporate headquarters from Kirkland to Issaquah, positioning the new facility next to one of its warehouse stores to improve managerial oversight. Plans to relocate to Redmond were scrapped due to delays in infrastructure development. Later that year, the 10.7-acre Kirkland site was sold.

Beginning in late 1996, PriceCostco locations in the Southwestern United States started transitioning to the Costco brand. By February 1997, the firm officially reverted to the Costco name and ticker symbol, finalizing the rebranding of all former Price Club stores. In March 2020, Costco bolstered its logistics network by acquiring Innovel for $1 billion, further enhancing its supply chain infrastructure.

Other company milestones

In March 2005, Costco replaced its original Seattle warehouse with a new facility built on adjacent land purchased from Seattle Public Schools, maintaining the same address. The old site was redeveloped into a parking area, gas station, and introduced the company's first car wash in 2006. By 2014, Costco had become the third-largest retailer in the United States and announced intentions to enter China’s market through an online store hosted on Alibaba Group's platform.

The year 2016 saw Costco open 29 new warehouses, marking its most significant annual expansion since 2007. Since 1989, Span Construction under King Husein has been the primary contractor responsible for building Costco warehouses, playing a key role in supporting the company’s growth plans.

Costco launched its first Chinese warehouse in August 2019 located in Shanghai, which attracted exceptionally strong customer traffic. In September 2022, the company opened its first store in New Zealand’s West Auckland region; this opening was postponed from mid-August due to economic disruptions caused by the COVID-19 pandemic.

Costco today

Costco competes primarily against Sam's Club (owned by Walmart) and BJ's Wholesale Club within the U.S. membership warehouse sector. The company employs approximately 316,000 full-time and part-time staff worldwide. Membership numbers have steadily increased from 90.3 million in 2017 to 129.5 million as of November 2023.

Costco was the first retailer to surpass $3 billion in sales within six years of operation. For the fiscal year ending August 31, 2012, it reported sales of $97.1 billion and net earnings of $1.7 billion. By 2019, Costco ranked 14th on the Fortune 500 list based on revenue. The American Customer Satisfaction Index recognized Costco as the highest-rated specialty retail store in 2014 with a score of 84.

From December 2013 onward, co-founder Jeffrey H. Brotman served as board chairman alongside co-founder James Sinegal and executives CEO W. Craig Jelinek and CFO Richard A. Galanti. After Brotman passed away in August 2017, Sinegal remained on the board until his retirement in 2018.

During the 2010s, Costco outgrew its initial Issaquah headquarters campus (Buildings 1–3) and expanded into leased office spaces around the city. Construction began in April 2019 on Building 5—a multi-level parking structure featuring meeting rooms and fitness facilities—followed by Building 4, a nine-story office tower near Interstate 90 completed in June 2023. Headquarters personnel moved into Building 4 while the original buildings now accommodate Costco’s IT department.

Locations

Costco currently manages 905 warehouse facilities across the globe, distributed as follows:

• 624 locations throughout the United States, including Puerto Rico
• 109 sites in Canada
• 41 warehouses in Mexico
• 37 stores in Japan
• 29 outlets across the United Kingdom
• 19 branches in South Korea
• 15 establishments in Australia
• 14 facilities in Taiwan
• 7 stores operating in China
• 5 locations within Spain
• 2 warehouses each in France and Sweden
• A single warehouse each in Iceland and New Zealand

Globally, Costco’s warehouse design remains uniform, characterized by a straightforward loop layout guiding customers from entry to checkout. The company has collaborated with the architectural firm MG2 on over 800 projects, typically completing construction within approximately 110 days.

The food courts adapt their offerings to regional preferences, featuring items such as Australian meat pies, Canadian and French poutine, seafood-topped pizzas in Asian markets, pastor taco pizzas in Mexico, clam chowder available in Japan, South Korea, and Taiwan, Icelandic plokkfiskur, and traditional jacket potatoes served in the UK.

In Canada, Costco complies with the voluntary Scanner Price Accuracy Code, which is overseen by the Retail Council of Canada.

Warehouses within mixed-use developments

In September 2024, Costco commenced building its inaugural U.S. mixed-use development that integrates a warehouse with an 800-unit residential complex above it, situated in Baldwin Village, South Los Angeles. This project is being developed alongside real estate partner Thrive Living. Approximately 23% of the apartments will be allocated for low-income housing, while the remainder will serve workforce and market-rate residents. This initiative takes advantage of California’s AB 2011 affordable housing legislation enacted in July 2023 and marks a strategic move by Costco into urban-integrated developments.

Largest and smallest warehouses

Costco’s largest facility has grown from a 148,663 square-foot store in Hillsboro, Oregon (opened in 2005) to a 235,000 square-foot hybrid warehouse-business center format located in Salt Lake City, Utah (opened in 2015), which was its biggest footprint worldwide at that time. In 2023, plans for a new store in Fresno, California, initially projected at 241,000 square feet to become the world’s largest warehouse, were reduced to 219,000 square feet after city approval. In Canada, the largest Costco opened at 182,000 square feet in St. John’s, Newfoundland and Labrador (2019).

The smallest warehouse remains the Juneau, Alaska location at 76,696 square feet. This facility is the last remaining example of a small-format warehouse pilot initiated in 1993. While smaller-format stores were largely unsuccessful elsewhere, Juneau’s market supported this model’s viability.

Costco Business Centers

Costco Business Centers are accessible to all Costco members but primarily cater to small businesses. Unlike standard Costco warehouses, these centers do not stock most consumer goods such as apparel or jewelry. Instead, they emphasize bulk quantities and an expanded range of business-focused products. Over 70% of their inventory is distinct from that found in regular warehouses. Certain Business Center locations include amenities like food courts or fuel stations and provide ample parking designed for trucks to facilitate large deliveries. Orders below $250 incur a $25 delivery fee. Business Centers operate with shorter hours than typical warehouses—usually opening at 7:00 am Monday through Saturday and closed on Sundays. Promotions and discounts are managed independently from those at standard Costco locations.

The first Business Center was established in October 1996 by converting an existing Costco warehouse in Lynnwood, Washington. This change aimed to better serve business customers following the opening of a nearby traditional Costco store in Everett. This approach aligns with Costco’s broader strategy to increase market penetration by targeting small business clients through specialized outlets like Business Centers.

Locations

By August 2022, Costco had established 26 Business Centers throughout the United States. The company's initial international Business Center debuted in Scarborough, Ontario, Canada, in March 2017. Further expansion in Canada followed with new sites opening in Saint-Hubert, Quebec, in September 2020, and Gloucester, Ontario, in March 2021, illustrating a deliberate growth strategy within the North American region.

Finances

Sales by business (2023)

Business	Share
Food and sundries	40.5%
Non-foods	25.6%
Warehouse ancillary and other	20.5%
Fresh foods	13.5%

Sales by region (2023)

Region	Share
United States	72.9%
Canada	13.6%
Other international	13.5%

Year	Revenue (mil. US$)	Net income (mil. US$)	Price per Share (year end, US$)	Warehouses	Employees
2005	52,935	1,063	33.80	433	115,000
2010	77,946	1,303	52.22	540	147,000
2015	116,199	2,377	136.72	686	205,000
2020	166,761	4,002	358.50	795	273,000
2023	242,290	6,292	656.27	871	316,000

Costco’s financial results reflect steady expansion and growing market presence over nearly twenty years, marked by rising revenues and profits. The company’s operations are heavily concentrated in the United States while maintaining notable shares in Canadian and other global markets. The growth in warehouse numbers and workforce size highlights ongoing commitments to infrastructure development and employee recruitment to support its broadening range of products and services.

Sales volume

In the year 2011, the highest sales volume among Costco stores was recorded at the Seoul location in South Korea. By 2018, the Taichung store in Taiwan led in membership count and ranked second worldwide for sales volume after Seoul’s Yangjae store. Among Costco's fourteen stores across Taiwan, Taichung along with Neihu and Chungho districts were all ranked within the global top ten for sales volume.

Ownership

Institutional investors hold a dominant stake in Costco with ownership exceeding seventy percent of shares as of September 2024. The largest shareholders at that time include:

• The Vanguard Group (9.40%)
• BlackRock (7.56%)
• State Street Corporation (4.06%)
• Geode Capital Management (2.14%)
• Morgan Stanley (2.13%)
• Fidelity Investments (FMR) (2.10%)
• Bank of America (1.59%)
• Norges Bank (1.20%)
• Northern Trust (1.05%)
• BNY Mellon (1.01%)

Business model

Costco functions as a membership-based warehouse club where membership fees represented more than seventy-two percent of net operating income during fiscal years 2022 and 2023, decreasing slightly to sixty-five and a half percent in fiscal year 2024.

The company categorizes its revenue and operating income into three primary segments:

• United States Operations: accounting for 72.4% of total revenue
• Other International Operations: contributing 13.9%
• Canadian Operations: comprising 13.7%

Sales model

Costco implements stringent limits on product markups, capping regular items at a maximum of 14% above cost and Kirkland Signature products at 15%. The company maintains a lean operational structure, with overhead expenses representing roughly 10% of total revenue, and sustains profit margins close to 2%. Notably, Costco refrains from engaging in external advertising and does not maintain a public relations team, underscoring its focus on cost efficiency.

The sales strategy prioritizes a streamlined product assortment rather than extensive variety. Unlike typical retailers that offer numerous product variations, Costco stocks only one or two versions of each item to encourage higher volume sales at lower prices. A standard warehouse carries about 3,700 unique products, in contrast to nearly 140,000 items found in a Walmart Supercenter. Costco declines to carry merchandise if wholesale costs are considered excessive, exemplified by its short-lived 2009 dispute with Coca-Cola. Suppliers must provide products in bulk packaging arranged on pallets suitable for warehouse shelving; however, Costco does not impose slotting fees for shelf placement.

This selective purchasing strategy grants Costco considerable leverage as an intermediary linking manufacturers with consumers. Smaller producers can gain access to international markets through Costco’s global network if their products succeed domestically.

Although the company aggressively controls costs, opening new warehouses demands significant capital investment. In 2013, the average store cost approximately $80 million due to the need for large retail spaces (around 150,000 square feet), extensive parking facilities, and often integrated fuel stations. Energy-saving features such as skylights and automated lighting systems help reduce electrical consumption during daylight hours.

Since its introduction in 1994, rotisserie chicken has been a key revenue generator, benefiting from increasing per capita chicken consumption in the U.S. In 2019, Costco launched a vertically integrated poultry production plant in Nebraska to ensure competitive pricing and consistent quality. On the international front, certain locations offer freshly prepared sushi; notably, the Issaquah warehouse was the first U.S. store to provide this service in 2023.

To enhance customer service and ensure transaction accuracy, Costco employs exit greeters who cross-check receipts against shopping carts before customers leave. This practice has been part of the company’s operational approach since the inaugural store opened in Seattle in 1983.

Management model

Costco is distinguished by a robust corporate culture that values employee loyalty and emphasizes internal promotion. By 2024, over 90% of new hires who complete their first year remain with the company. Numerous top executives began their careers on the warehouse floor and advanced through the ranks over time; for example, CEO Ron Vachris started as a forklift operator in 1982 and became only the third CEO in Costco’s history by 2024. With approximately 95% of its staff employed in warehouses, the company culture strongly supports frontline operations.

At its headquarters in Issaquah, all 7,000 employees—including the CEO—work within cubicles, although the CEO’s workspace is slightly larger. Executives are expected to dedicate substantial time to visiting warehouses worldwide to resolve operational challenges. The CEO aims to tour every warehouse every 18 to 24 months, while regional leaders conduct more frequent visits within their territories.

Online shopping

Costco primarily encourages its members to shop at physical warehouse locations rather than through its online platform. Nevertheless, the COVID-19 pandemic triggered a remarkable surge in e-commerce sales, with 2020’s online revenue exceeding the combined total of the previous five years. The company launched its e-commerce website in November 1998 and expanded into business-to-business online sales by April 2001.

To facilitate grocery delivery, Costco has partnered with services such as Instacart, which operates in selected U.S. states and Canada, handling deliveries of non-dry goods and pantry essentials. In March 2017, Costco formed an alliance with Shipt, a service that requires a separate membership but provides free delivery on orders above $35; by late 2018, Shipt was available in certain Florida regions. Later that year, in October 2017, Costco began offering same-day and two-day grocery delivery options.

Since June 2023 in Iceland, Costco has enabled individuals aged over 20 to order alcoholic beverages online for pickup at warehouses—a "click and collect" approach previously restricted to licensed commercial buyers.

Products

Costco’s merchandise assortment is frequently refreshed, often featuring items on a temporary or seasonal basis. Founder Jim Sinegal described this strategy in a 2017 address as cultivating a "treasure-hunt atmosphere," which encourages customers to act quickly due to the possibility that products may not be restocked on subsequent visits.

While initially centered on bulk goods displayed on pallets, Costco’s product selection has broadened extensively. By 2025, the inventory encompasses categories such as art, literature, caskets, apparel, computer software, premium wines, furniture, household appliances, electronics, hot tubs, jewelry, and perishable items like dairy products, baked goods, flowers, fresh produce, meat, and seafood. The range also includes specialty products like solar panels, tires, and vacuum cleaners. This wide variety reinforces Costco’s leading market position in several sectors; for instance, it accounts for over half of global cashew sales, impacting the livelihoods of more than one million African farmers.

Beyond merchandise, many warehouses offer additional services including fuel stations, pharmacies, hearing aid centers, optometry and eyewear departments, and tire installation facilities—enhancing the overall customer experience while supporting Costco’s integrated business approach.

Alcohol

Costco’s alcohol offerings differ according to local regulations. Some warehouses operate separate liquor store facilities to comply with licensing requirements, whereas others include alcohol sales within the main shopping area. In states such as Texas, liquor sales necessitate distinct business entities and dedicated personnel.

In 2006, Costco was unsuccessful in a legal challenge against Washington state’s requirement to purchase wine exclusively through a state-controlled system. Subsequently shifting tactics, Costco invested over $22 million backing Initiative 1183—the most costly initiative campaign in Washington’s history—which passed with 60% voter approval in 2011. This measure ended the state’s monopoly on liquor distribution and allowed private retailers to sell alcohol.

Locations with extensive wine selections employ "wine stewards" who assist customers; as of October 2024, approximately 30 U.S. warehouses had such specialists on staff. Grand openings frequently feature rare or discounted whiskey, wine, and other alcoholic beverages that attract considerable attention—for example, the October 2024 launch of Costco’s first Napa Valley warehouse drew whiskey aficionados camping six days in advance.

Internationally, Costco tailors its alcohol sales to comply with regional laws: its Victoria store in Australia sells alcohol openly under permissive licensing regulations; however, its only New Zealand warehouse in West Auckland is unable to sell alcohol due to a local retail monopoly.

Books

For the initial forty years, Costco played a significant role as a prominent American bookseller, offering a rare physical retail option during the rise of e-commerce leader Amazon and large-scale retailer Barnes & Noble. Costco’s approach involved purchasing tens of thousands of copies per title, which provided critical support to publishers in an industry where printing 50,000 copies is considered substantial.

In the 2020s, Costco’s leadership began reassessing the viability of books as a continuous product category due to elevated labor expenses. Weekly releases necessitate manual unpacking and presentation, while unsold stock must be returned to publishers. Consequently, in 2022, Costco discontinued year-round book departments at its Alaska and Hawaii locations.

By mid-2024, Costco announced plans to restrict book offerings to seasonal availability across all 600 mainland US warehouses starting January 2025, maintaining full book sections exclusively during the holiday period. This change sparked concerns about potential effects on an already sluggish publishing industry. In response, by November 2024, Costco committed to preserving year-round book sections in 100 of its mainland warehouses.

This strategic evolution highlights Costco’s emphasis on enhancing inventory control and labor efficiency while continuing to serve as a significant participant in the bookselling sector.

Gold and Platinum bullion products

Costco introduced one-ounce, 24-karat gold bars for sale in October 2023. These bars are generally priced around 2% above the spot price, with executive members receiving 2% cash back and certain credit cardholders obtaining an additional 2%. This positions gold bar sales as a low-margin offering and functions as a loss leader designed to encourage store memberships. Wells Fargo estimates that Costco moves up to $200 million worth of gold bars monthly.

Expanding on this initiative, in 2024 Costco launched platinum .9995 fine bars available directly to consumers via its website, broadening its range of precious metal products.

Kirkland Signature: Costco's private label brand

Kirkland Signature is Costco's private label brand introduced in 1995 and named after the company’s original headquarters in Kirkland, Washington. It accounts for nearly one-third of Costco's total sales and experiences growth exceeding that of the company’s overall revenue.

In 2024, Kirkland Signature achieved $86 billion in revenue, outperforming consumer goods leader Procter & Gamble for the year.

The brand strategy centers on providing name-brand quality at reduced prices. To foster consumer confidence, Costco co-brands several products with well-known manufacturers such as Chinet, Jelly Belly, Keurig Green Mountain, Ocean Spray, Stearns & Foster, and Starbucks. Other Kirkland products are manufactured by reputable companies like Duracell and Niagara Bottling but feature generic packaging. The design typically favors simplicity, highlighting value rather than branding.

Costco’s CEO personally reviews and approves all Kirkland Signature items to guarantee quality standards and sales success; products that underperform are swiftly discontinued.

For manufacturers, collaborating with Kirkland Signature reduces expenses related to brand-building marketing efforts. This partnership allows innovative products with narrow profit margins to be launched nationwide through Costco’s extensive warehouse network.

Costco Connection

Costco Connection is a complimentary magazine distributed to Costco executive members and available online. By 2024, its circulation extends to 15.4 million households, with 300,000 copies placed in warehouses, making it the third-largest magazine in the U.S. by circulation, following two AARP titles.

Initially launched as a newsprint publication in 1987, it transitioned into a magazine format in 1997. The content spans corporate news, business insights, celebrity interviews, culinary topics, health advice, home improvement tips, and coupons. Approximately 90% of its advertising is cooperative; however, national advertisers such as Procter & Gamble increasingly purchase ad space due to the magazine’s broad audience and detailed subscriber demographics—the average reader’s household income stands at $156,000. Each month, around 56% of subscribers report making purchases influenced by the magazine.

Concierge service

Costco offers a complimentary concierge service for customers purchasing electronics to assist with setup and usage guidance, aiming to reduce product returns caused by user confusion.

Costco Auto and Home Insurance

Through a partnership with CONNECT, powered by American Family Insurance, Costco provides auto, home, and umbrella insurance options. This collaboration broadens Costco’s service offerings while generating additional revenue.

Costco Optical

Ranked as the fifth-largest optical retailer in the U.S. as of 2015, Costco Optical serves patients through its optometrists without requiring a Costco membership for eye exams; however, filling prescriptions necessitates membership. This approach expands customer access while enhancing membership value.

Costco Travel

A wholly owned subsidiary, Costco Travel delivers vacation packages to members in the U.S. and Canada. It focuses on popular destinations such as the Caribbean, Europe, Florida, Hawaii, Las Vegas, Mexico, and the South Pacific, strengthening Costco’s presence in travel services.

Food service

Costco started offering freshly prepared food in 1985 with a hot dog cart at its first Seattle warehouse. Today, most warehouses feature food courts with a standardized menu that includes their signature quarter-pound 100% beef hot dog paired with a 20-ounce drink for $1.50—a price unchanged since 1985—alongside pizza, frozen yogurt or ice cream, PepsiCo beverages, baked goods, and sandwiches. Certain U.S. locations also serve Polish sausage or bratwurst at the same price.

Originally sourced from Hebrew National and Sinai Kosher suppliers, Costco began producing its hot dogs internally under the Kirkland Signature label in 2009 to sustain low prices amid supply challenges and slim profit margins. Internationally, hot dog varieties differ: pork in Australia and New Zealand (AUD/NZD $1.99), beef in Canada (C$1.50), Mexico (MXN$35), the UK (£1.50), Taiwan, and Japan (¥180). In 2017 alone, Costco sold over 137 million quarter-pound hot dogs worldwide. CEO Ron Vachris confirmed in July 2024 that the $1.50 price point will remain unchanged.

As of April 2024, U.S. food courts offer cheese or pepperoni pizza (including pre-orders for take-home), chicken bakes, various ice cream flavors, fruit smoothies, latte and mocha freezes, and chocolate chunk cookies replacing churros. Regional specialties include bulgogi bake and mango boba tea available in Australia, Taiwan, South Korea, and Japan; poutine served in Canada and France; along with limited-time items such as pastor taco pizzas in Mexico.

United States menu changes in March 2020

Original Item	Replacement Item
Veggie/combo Pizza	Discontinued (including "Italian Sausage" topping)
Frozen yogurt	Substituted with vanilla ice cream topped with chocolate sauce sundae
Turkey provolone	Discontinued
Twisted churro	Replaced by chocolate chunk cookies after briefly offering two churro flavors
Chicken Caesar salad	Returned to availability at select locations
Chicken bake	Switched to factory-made versions; no longer hand-prepared at most sites
Sauerkraut (topping)	Discontinued
Deli mustard (condiment)	Discontinued; relish offered selectively with plans for reintroduction

In 2009, churros replaced pretzels due to slow sales performance. Pepsi became the fountain drink supplier at U.S. warehouses in 2013 to help maintain the $1.50 hot dog combo price; however, Costco intends to switch back to Coca-Cola products starting early 2025.

From mid-2017 until 2020, Costco trialed a one-third pound cheeseburger at select stores but discontinued it due to limited popularity. Diced onions were removed from toppings in March 2020 but were reintroduced in May 2023.

Costco credit card

On April 1, 2016, Citigroup took over as the sole issuer of Costco's branded credit cards in the United States, succeeding American Express, which had held this role since 2001. This transition led Costco to discontinue acceptance of AmEx cards and exclusively accept Visa cards. American Express attributed the separation to Costco's insistence on lower transaction fees than AmEx was prepared to provide. In Canada, Costco ended its collaboration with AmEx in 2014 and began offering Capital One Mastercard credit cards starting in 2015. Capital One announced the termination of this partnership in late 2021, with a new agreement commencing in March 2022 involving CIBC Mastercard. Credit cards issued under these partnerships also serve as alternate membership cards, displaying personalized membership details on their reverse side.

Costco Audiobook App

In March 2021, Costco introduced an audiobook marketplace along with a complimentary app for iOS and Android devices, enabling members to listen to purchased titles. Audiobooks are sold in curated bundles organized by genre or author, priced between $5 and $50, and are currently available exclusively at U.S. locations.

Employee rights

While some former Price Club stores located in California and the Northeast employ staff represented by the Teamsters, most Costco warehouses remain non-unionized, despite a unionization effort in Canada during 2012. The Teamsters currently represent over 15,000 Costco employees. At non-union locations, the Employee Agreement is revised every three years and addresses aspects such as wages, benefits, disciplinary policies, holidays, bonuses, and seniority rights. As of June 2022, hourly wages for non-management employees ranged from $17.50 to $28.45 in the U.S., from $16.00 to $28.70 in Canada, and from £9.75 to £13.90 in the United Kingdom. In 2005, approximately 85% of U.S.-based Costco workers had health insurance coverage—significantly surpassing rates at Walmart or Target—with plans provided by companies including Aetna and Teladoc, alongside wellness programs like Omada.

In February 2021, Costco increased its U.S. starting hourly wage to $16, following earlier raises from $14 in 2018 and $15 in 2019; this adjustment impacted about 20% of hourly staff.

In 2023, a store in Norfolk, Virginia successfully unionized under the Teamsters—the first such victory for a Costco location in more than two decades. Then, in January 2025, Teamsters representing over 18,000 Costco employees authorized a nationwide strike aimed at securing improved wages and benefits.

Contractors

Costco exclusively partners with two independent firms—Club Demonstration Services (CDS) and Warehouse Demo Services (WDS)—to provide in-store product demonstrations, particularly for food sampling. These contractors employ workers at lower pay rates and with fewer benefits compared to Costco’s direct employees. Since August 2017, CDS has managed demonstration services within Canadian stores.

Due to the COVID-19 pandemic, demonstrations at U.S. locations were halted in March 2020; some CDS workers were temporarily reassigned to cleaning duties before layoffs occurred when CDS suspended operations. Demonstration activities gradually resumed beginning June 2020 and were fully restored across all U.S. warehouses by June 2021, reinstating jobs connected to this service.

Costco Home

The inaugural Costco Home warehouse debuted in December 2002 in Kirkland, Washington, merging Costco’s membership and value-driven approach with premium home products from brands such as Lexington, Ralph Lauren, and Waterford. A second store followed in 2004, located in Tempe, Arizona.

On April 2, 2009, Costco declared the closure of both locations by July 3, 2009, and canceled plans for a third store planned for Portland, Oregon, thereby discontinuing the Costco Home initiative. In 2024, the company introduced an appliance and furniture showroom in Anchorage, Alaska, reflecting a strategic adjustment in its merchandise focus.

Costco Fresh

In September 1999, Costco unveiled plans for a grocery-centric format called Costco Fresh, intended for a 75,000-square-foot, two-level site in Manhattan, New York City. However, due to escalating expenses and local resistance, the project was abandoned within the same year. The concept was revived at the end of 2002 with a proposed store in Bellevue, Washington—close to Costco’s headquarters in Issaquah—on a former Kmart property. This location prioritized fresh fruits and vegetables, meats, seafood, and baked goods over bulk purchases and featured a modified logo including a fruit stem on the first "o" of Costco’s name. Despite this, the concept was discontinued the following year. Nonetheless, Costco showed continued interest in opening a conventional warehouse at the Bellevue site until 2008, when zoning requirements mandating daylighting an underground creek led to abandoning those plans.

Animal welfare

In 2010, Mercy for Animals conducted an undercover investigation at Buckeye Veal Farm—a veal supplier for Costco. Following this exposure, Costco implemented a policy prohibiting purchases from producers employing crate-and-chain veal production methods. This action contributed to Ohio legislators voting to phase out veal crates. In 2012, another Mercy for Animals investigation targeted pork suppliers serving retailers including Costco, Walmart, Safeway, Kroger, and Kmart. Prior to public disclosure of these findings, Costco committed to eliminating gestation crates from its pork supply chain.

In 2015, the Humane Society of the United States revealed substandard conditions at Hillandale Farms—a significant egg supplier to Costco—where hens were confined in small wire cages. This disclosure sparked public outcry supported by celebrities such as Brad Pitt and Ryan Gosling. By December 2015, Costco pledged to source only cage-free eggs. In December 2020, Costco announced its intention to phase out battery cage eggs worldwide, becoming the first U.S. retailer to adopt a global policy against animal confinement. Josh Dahmen, Costco’s financial planning director, confirmed ongoing efforts aimed at achieving 100% cage-free egg sourcing.

In 2016, Direct Action Everywhere reported incidents of cannibalism and elevated mortality rates at a cage-free egg supplier associated with Costco. While Costco refuted these claims, the investigation underscored persistent welfare challenges within cage-free farming systems. DxE co-founder Wayne Hsiung contended that these findings raised broader ethical concerns regarding hen husbandry for food production.

In October 2020, Costco ceased purchasing Chaokoh coconut milk after allegations surfaced accusing its manufacturer—the Theppadungporn Coconut Co.—of employing forced monkey labor. Ken Kimble, Vice President of Corporate Food and Sundries at Costco, condemned these practices and announced an internal investigation while suspending orders from the supplier.

In February 2021, Mercy for Animals exposed cases of immobile chickens suffering chemical burns at a Nebraska Costco facility. New York Times columnist Nicholas Kristof criticized Costco for breeding chickens susceptible to suffering as part of cost reduction strategies. In June 2022, two shareholders filed suit against Costco executives alleging breach of fiduciary duty related to animal welfare violations involving fast-growing chicken breeds raised in Nebraska and Iowa—arguing that such practices damage Costco’s consumer reputation.

Environmental standards

In 2014, allegations were made by the US Department of Justice and EPA accusing Costco of postponing repairs on refrigerant leaks within its stores. As a result, Costco incurred a $335,000 penalty and pledged $2 million over a three-year span to address leak repairs and enhance refrigeration systems across 274 sites.

Costco encountered criticism in 2019 from the Natural Resources Defense Council and SumOfUs concerning its procurement of toilet paper derived from virgin Canadian boreal forests. The NRDC emphasized that over two decades, 28 million acres of this forest area had been harvested specifically for tissue manufacturing.

Labor standards

A 2014 report by The Guardian connected Costco’s supplier, Charoen Pokphand Foods, to instances of slave labor within its prawn supply chain. Costco responded by noting that since 1999 it has enforced a supplier code of conduct that forbids such practices and conducts regular independent audits to verify adherence.

In June 2023, a heatstroke incident resulted in the death of a Costco employee in South Korea while they were managing carts outdoors. The store neglected government heatwave regulations mandating breaks every hour, instead providing only 15-minute breaks every three hours without reliable access to water. Consequently, the Ministry of Employment and Labor imposed a ₩30 million fine on Costco for safety breaches.

Pharmacies

In September 2016, Costco voluntarily reported to the Office of Inspector General that its pharmacy in Waltham, Massachusetts had improperly modified prescription drug claims submitted to Medicare Part D and Massachusetts Medicaid, causing overpayments. The company settled with a payment totaling US$340,157.25. Subsequently, in January 2017, Costco resolved a US lawsuit involving inadequate pharmacy oversight that violated the Controlled Substances Act by filling incomplete prescriptions and those outside physicians’ authorized scope, resulting in an $11.75 million payment.

In 2019, Ontario’s Ministry of Health penalized Costco CA$7.2 million after it was found to have accepted unlawful rebates from a generic drug manufacturer in return for preferentially stocking their products. Two directors from Costco’s pharmacy division were fined and referred to the Ontario College of Pharmacists for professional misconduct.

Product quality

The US Consumer Product Safety Commission recalled the EKO Sensible Eco Living Trash Can sold by Costco in July 2015 due to a defect exposing a sharp edge hazard. Costco faced a fine amounting to US$3.85 million for failing to report 92 customer complaints, including 60 injury cases.

In 2017, legal disputes arose between Costco and Acushnet Holdings regarding golf ball patent infringements. That year also saw a federal court order Costco to pay Tiffany & Co. US$19.4 million for deceiving consumers about the authenticity of Tiffany-branded jewelry sold at warehouse prices.

Costco discontinued Palmetto Cheese in September 2020 after the brand owner publicly described Black Lives Matter as a "terror organization," prompting over 120 stores across the US to cease carrying the product.

In 2023, Costco was subject to regulatory penalties internationally: Taiwan’s Kaohsiung Department of Health fined the company NT12.5 million and temporarily prohibited mixed berry sales following Hepatitis A contamination; Australia imposed a $33,000 fine for misrepresenting Canadian lobster as Australian; and Iceland’s Environment Agency levied an ISK 20 million fine for an oil spill contaminating local sewage infrastructure.

See also

• Bulk foods
• Costco bear
• Costco Guys
• Costco Wholesale Corp. v. Omega, S. A.
• Wholesaling

External links

• Official website for the UK
• Instagram profile